Kaveri Fertilizer Industries vs State Of Kerala

Mohammed Nias C.P., J

The petitioner is stated to carry on the business of manufacture and wholesale distribution of organic manures and bio-fertilizers. The petitioner is also manufacturing and wholesale distribution of UV-protected HDPE multi-layer Blow pots, etc., for vegetable cultivation. The fifth respondent, the implementing officer related to agricultural schemes of the Janakeeyasoothranam project of the second respondent published an e-tender notice dated 16.1.2023 inviting tenders for distribution of HDPE Pots, potting mixture, and vegetable seedlings from the Authorised Distributors/Manufacturers/Karshika Karmasena/Agro Service Centre for the year 2023 under the Janakeeyasoothranam project No.1082, 22-23, with Government approved specifications. The tender notice is produced as Ext.P2, according to which the petitioner submitted an e-tender/bid, the acknowledgment of which is produced as Ext.P3.

The petitioner submits that the fifth respondent had received five tenders. Clause 10 of Ext.P2 stipulates that all conditions of the Store purchase manual of the Government of Kerala dated 21.6.2013 of the Local Self Government Department apply to the tender. Ext.P10 store purchase manual mandates follow a two-bid system namely a technical bid/price bid and the bid should be opened only of those vendors who were technically qualified by the department /organisation which the fifth respondent was bound to follow. The petitioner submits that on 8.2.2023, after opening the technical bid, the petitioner received an e-mail from the e-tendering system of the Government of Kerala stating that the petitioner’s technical bid was successful. The petitioner contends that he alone was the technically qualified bidder since all the required documents stipulated by the conditions in Ext.P2 were satisfactorily approved and produced only by the petitioner.

Among the five tenderers, the sixth respondent could not successfully cross the technical bid due to the non-submission of the requisite documents, especially the test reports of the CIPET which assures quality parameters of the pots. It is also the contention of the petitioner that ‘M/s.Sowmya Plastics” does not manufacture virgin HDPE products with the brand name “M/s.Sowmya Plastic” with five years of durability and environmental friendliness which is a mandate under Ext.P5. It is also stated that the technical bids are not to be opened prior to the completion of the pre-qualification evaluations, going by the relevant clauses of the Store purchase manual. Under such circumstances, the petitioner submits that since the petitioner was the only bidder who succeeded in the pre-qualification evaluation, consideration of the other tenders is barred under the provisions of the store purchase manual, Ext.P10. Notwithstanding the above stipulation, the fifth respondent illegally extended an invitation to facilitate the sixth respondent and time was given to produce the test report. A month was granted, as in the initial documents submitted, the sixth respondent did not have any certification regarding the five-year durability and environmental friendliness of the pots which is a pre-requisite for considering the technical bid, as evident from Ext.P10. Despite the petitioner being the only qualified tenderer as per Exts.P2 and P5, the sixth respondent was awarded the tender, which is challenged in the writ petition. The petitioner and the sixth respondent were called for negotiation and on the ground that the sixth respondent had quoted a lower rate, the tender was awarded to the sixth respondent. The writ petition challenges the decision taken to award the tender to the sixth respondent and also prays for directing the fifth respondent to grant the tender to the petitioner being the lower successful bidder in the technical bid held on 7.2.2023.

A counter affidavit has been filed on behalf of the fifth respondent submitting that the five bidders participated in the tender out of which three bidders including the petitioner and the sixth respondent qualified in the technical bid. It is submitted that after the opening of the tender, the fifth respondent had to report the details of the technically qualified bidders to the procurement committee to proceed with the other formalities and in the first procurement committee of the Corporation held on 22.2.2023, time was granted to two technically qualified bidders, other than the petitioner who had already submitted the CIPET certificate to submit a fresh CIPET certificate. It is also submitted that thereafter there was a negotiation in which the sixth respondent had quoted a lower rate, and that was the reason why the contract was awarded. It is also their submission that the bidders need not manufacture virgin HDPE pots with brand names and other details encrypted on the pot as they are not essential conditions in the Government Order/tender conditions. It is reiterated that the sixth respondent was technically qualified, and therefore they were called for negotiation along with the writ petition.

The sixth respondent had filed a counter affidavit submitting that he was successful in the technical bid and all the required documents were submitted. It is submitted that the very fact that the life of the HDPE pots is five years is clear from the Government Order and therefore there was no requirement for any additional statement about the life of such pots. It is also stated that the fifth respondent had properly conducted the procedure and awarded the contract to the sixth respondent and that the petitioner's quote was almost Rs.14 lakhs more than that the quote of the sixth respondent. On that basis, the grant of tender to the sixth respondent sought to be justified.

Heard, Smt.Mini. V.A. learned counsel for the petitioner, Sri.Naveen Thomas for the sixth respondent, Sri. Santhosh P. Poduval learned Standing Counsel and Sri. S. Ranjith, the learned Special Government Pleader for the other respondents.

A reading of Ext.P2 would clearly show that the specification must be as prescribed in Ext.P2 as well as other Government Orders and accordingly the conditions had to be as per Ext.P2, the tender notice Ext.P5 dated 18.11.2022, Ext.P17 dated 24.11.2022 and Ext.P18 dated 30.10.2023. Ext.R5(a) proceedings clearly showed that the sixth was granted a month more to produce the documents which shows that the original documents produced did not meet the criteria, otherwise, there was no requirement to grant one month more time. In this context, the contention of the petitioner that he was the lowest technically qualified bidder has to be considered. The present stand of the sixth respondent and the official respondents is that the original certificate produced by the sixth respondent was sufficient. If that be so, there was no necessity at all to grant further time. It is also to be noted that the conditions in the other Government Orders referred to the specifications of HDPE pots that had to be met by the sixth respondent. As far as the rate is concerned, the petitioner would contend that it is not clear whether the sixth respondent was using virgin plastic HDPE pots or recycled and if recycled plastic is permitted, the petitioner is also willing to supply at the same rate if not a lesser rate. It is also submitted that the sixth respondent does not own the product or the brand name noted as ‘Anneo’ in the product offered by the sixth respondent as it is a different manufacturer.

The relevant conditions/quality parameters noted in Exts.P2, P5, P17 and P18 are as follows:-

P2 is the tender notice dated 16.01.2023 which stipulates,

● The tender application is considered in accordance with the Store Purchase Manual and G.O(P) 3/2013/SPD dated 21.06.2016.

● The test reports of the CIPET assuring the quality parameters of their pots were uploaded along with the tender

● The potting mixtures must have the quality specified in clause 12 such as height. thickness, weight and diameter, Which are based on government specifications (according to P5)

P5 is the G.O.(Ord) No.2854/2022/LSGD dated 18-11-2022 issued by the Local Self Government (DA) Department mandates the specification of the pots etc. P5 mandates pots,

● Durability of 5 years or more, environmental friendliness, UV protection, virginity, tensile strength and elongation of the HDPE pot which is mandatory

● The material specification of HDPE plant pot should be as follows.

Height- 10 inch

Diameter- 10-12 inch

Thickness- 5 mm

Weight- 450 gm

P17 is the proceedings dated 24-11-2022 of the Unit Cost District Level Committee headed by the District Collector constituted as per the direction of the State Planning Board.

● In Ext. P17 it is specified that 12 inch multilayered UV protected pots with potting mixture and sapling are required

P18 is the the parameters of the quality have been issued by the Local Self Government Department as per Government Order No.2118/2023/LSGD dated 30-10-2023 in order to assure the quality of the pots. P18 specifies

● HDPE plant pots should be virgin material.

● HDPE plant pots should have UV protection.

● It should be certified as nature friendly as per FSSAI standard.

● HDPE plant pots should have 5 years durability

● To ensure a 5-year warranty, the manufacturing company information, month and year of manufacture must be inscribed on the pots (no sticker).

● The specification of HDPE plant pot should be as follows.

Height- 10 inch

Diameter- 10-12 inch

Thickness- 5 mm

Weight- 450 gm ”

Taking note of the above, it is not clear from the records whether the fifth respondent has considered all the above to find that the sixth respondent was technically qualified along with the petitioner, who admittedly was qualified. In a tender process, it is trite that it is the process that is under judicial review and not the final decision. The Supreme Court has consistently held that judicial intervention in public authority decisions relating to the award of contracts should be limited, and contracts entered into between private parties should not be scrutinised by courts using their writ jurisdiction. However, because public authorities are involved, the courts do allow for intervention in terms of how a decision, action, or process was reached. To be successful, the challenging party must show that the public authority’s decision, action, or process was (a) arbitrary, irrational, mala fide, whimsical, or contrary to law; (b) done to favour someone; or (c) done with an ulterior motive; (d) an abuse of statutory powers; or (e) harming the public interest. Furthermore, the challenging party could show that the condition for which non-compliance is being claimed was essential or non-essential. It is now well established that the courts can scrutinise the award of contracts by the Government or its agencies in order to prevent arbitrariness or favouritism. The Supreme Court of India in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. [(2006)11 SCC 548] laid down certain checks and balances as hereunder:

(a) If there are essential conditions, they must be followed.

(b) If there is no such power of general relaxation, it should not be used, and the principle of strict compliance should be pragmatic where all parties can fully comply with all such conditions.

(c) If, however, a deviation is made in relation to all the parties in regard to any of these conditions, a power of relaxation may be held to exist once more.

(d) The parties who have benefited from such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of the tender contract, particularly when he was also unable to fully comply with all the tender conditions, unless the court otherwise finds relaxation of a condition which, being essential in nature, could not be relaxed and thus the same was wholly illegal and without jurisdiction.

(e) When the appropriate authority makes a decision based on due consideration of the tender document submitted by all tenderers on their own merits, and it is ultimately determined that successful bidders substantially complied with the purport and object for which essential conditions were laid down, the decision may not ordinarily be interfered with.

(f) The contractors are not permitted to form a cartel. If, despite this, their bids are considered and they are given an offer that matches the rates quoted by the lowest tenderer, the public interest will take precedence.

(g) When a decision is made solely in the public interest, the Court should normally exercise judicial restraint.

It is also to be seen that the sixth respondent was given a favourable treatment by granting a month more to produce the documents and then the official respondents would say that even the original certificate produced would suffice. It is also to be noted that the tender itself specified that all the specifications in the other Government Orders have also to be considered. No such exercise has been done by the respondents before awarding the contract to the sixth respondent. Accordingly, the act of granting tender to the sixth respondent is vitiated, and therefore, the writ petition is only to be allowed, and the award of contract to the sixth respondent is quashed. It will be open to the fifth respondent to negotiate on the rates with the writ petitioner, as he is admittedly qualified instead of starting the tender process afresh to avoid further delay.

The writ petition is allowed as above.